GK Question- 41

First Published: May 13, 2012 | Last Updated:January 11, 2013

Consider the following observations about the provisions of Grant-in-aids in India:
1. The Article 275 of the Constitution of India provides that every state of India shall be allocated grants-in-aid
2. The allocation of grants-in-aid has to be uniformly distributed as per a ratio of the population / Income of the concerned state
3. The role of Finance Commission is to ensure that the grants-in-aid reaches every state as per the provisions of the Constitution of India
Which among the above statements is/ are correct?
[A]Only 1
[B]Only 1 & 2
[C]Only 2 & 3
[D]None of them

Explanation: The first statement is incorrect because article 275 does not say that every state of India is to be assigned some grant in aid. The basic rule is to have a system of Grants-in-aid to the “needy states”. The grants-in-aids are to be given out of the consolidated fund of India and the amount is fixed by the Finance Commission, using whatever formula it takes as a feasible formula. This means that some states can be kept out of grant-in-aids. Thus statement 2 is also incorrect, there is no need of uniform distribution. The statement 3 also mention that “grants-in-aid reaches every state as per the provisions of the Constitution of India” is incorrect.